According to a press release issued by the European Parliament, Members of the European Parliament voted 481 to 31 on Thursday to pass a controversial data bill, which will now be formally approved by the European Council. Concerns have been raised by the community that if the bill is formally approved, it may lead to the majority of smart contracts being deemed illegal.
The bill only regulates data generated by smart devices, machinery, and consumer products. However, it includes a provision requiring “automated data sharing agreements” to have a switch that can be safely terminated, but the bill does not explicitly state that this applies only to “private and authorized data records”, meaning that public and permissionless blockchain networks would also be covered by the bill.
However, smart contracts are typically immutable, once deployed on a blockchain, they cannot be easily modified or terminated. Therefore, if the bill requires all automated data sharing agreements to be easily terminated safely, this may contradict some fundamental features of smart contracts and lead to them being deemed illegal. Additionally, according to a report by CoinDesk in July of this year, the final text of the bill extensively mentions the term “smart contracts”.
Public blockchains such as Stellar, Polygon, NEAR, and Cardano signed an open letter in June expressing concerns about potential issues with this bill. The letter stated: